Local sources of financing for infrastructure in Africa : a cross-country analysis / Jacqueline Irving, Astrid Manroth.

Format:

Book

Government document

Author/Creator:

Irving, Jacqueline.

Contributor:

World Bank.

Manroth, Astrid.

Series:

Policy research working papers ; 4878.

World Bank e-Library.

Policy research working paper ; 4878

Language:

English

Subjects (All):

Financial institutions--Africa, Sub-Saharan.

Financial institutions.

Infrastructure (Economics)--Africa, Sub-Saharan.

Infrastructure (Economics).

Other Title:

Policy research working paper vol. 4878

Place of Publication:

[Washington, D.C. : World Bank, 2009]

System Details:

data file

Summary:

"With the exception of South Africa, local financial markets in sub-Saharan Africa remain underdeveloped and small, with a particular dearth of financing with maturity terms commensurate with the medium- to long-term horizons of infrastructure projects. But as financial market reforms gather momentum, there is growing awareness of the need to tap local and regional sources. Drawing on a comprehensive new database constructed for the purpose of this research, the paper assesses the actual and potential role of local financial systems for 24 African countries in financing infrastructure. The paper concludes that further development and more appropriate regulation of local institutional investors would help them realize their potential as financing sources, for which they are better suited than local banks because their liabilities would better match the longer terms of infrastructure projects. There are clear signs of positive change: private pension providers are emerging in Africa, there is a shift from defined benefit toward defined contribution plans, and African institutional investors have begun taking a more diversified portfolio approach in asset allocation. Although capital markets remain underdeveloped, new issuers in infrastructure sectors-particularly of corporate bonds-are coming to market in several countries, in some cases constituting the debut issue. More than half of the corporate bonds listed at end-2006 on these countries' markets were by companies in infrastructure sectors. More cross-border listings and investment within the region-in both corporate bonds and equity issues-including by local institutional investors, could help overcome local capital markets' impediments and may hold significant promise for financing cross-country infrastructure projects. "--World Bank web site.

Notes:

Title from PDF file as viewed on 5/7/2009.

Includes bibliographical references.

Publisher Number:

10.1596/1813-9450-4878